Morning Brief: BearingPoint Focuses on Debt

BearingPoint is stepping up its efforts to renegotiate its debt load.

Kenneth A. Hiltz, a managing partner with the turnaround firm AlixPartners, takes over as the company's new chief financial officer. His job will be finding ways of conserving cash and negotiating with the company's lenders, BearingPoint said in a statement on Monday.

The McLean software company has been trying to sell itself this year. Things have only gotten more pressing with the deteriorating economy as its stock price has slid. Last month, the New York Stock Exchange warned the company that if it did not boost the market value of the company, its shares could cease to be traded on the exchange.

BearingPoint said it needs to restructure some of its debt to do that. Investors are concerned because the company faces a potential April 15 deadline, when lenders have the option to require BearingPoint to pay back in full $200 million worth of that debt, plus interest.

Cash will be a big concern if BearingPoint can't reach a deal with its lenders. The company said on Monday that it had finished the third quarter with about $330 million worth of cash on its books.

Previously BearingPoint had told investors that it would likely need $150 million to run the company through the second half of next year. The company withdrew that guidance on Monday saying that "given the recent dramatic changes in global financial and credit markets and the continuing pressures that these events have placed on the Company's share prices, the Company is no longer confident that it can assess the near-term implications that these developments will have."

BearingPoint reported on Monday that it had posted a narrower loss of $30.5 million (14 cents per share) in the third quarter ended Sept. 30, compared to $68 million (32 cents) in the third quarter of 2007.

In other news, Fannie Mae Monday reported a $29 billion loss for the three months ended Sept. 30 and warned that the mission it was given by the government, to help revive the mortgage market, could be compromised unless the Treasury Department takes new steps to support the company. Read the article here.